Techno-economic assessment of photovoltaics plus electric vehicles towards household-sector decarbonization in Kyoto and Shenzhen by the year 2030

https://doi.org/10.1016/j.jclepro.2019.119933Get rights and content

Highlights

  • PV + EV becomes highly cost-effective towards 2030 in Kyoto.

  • Switching to EV is the most cost-effective option in Shenzhen during 2020s.

  • PV + EV has the highest decarbonization potentials.

Abstract

Finding economical and sustainable pathways for the deployment of renewables is critical for the success of decarbonizing energy systems. Because of the variable nature of renewable energy, however, the integration of renewables becomes increasingly costly and difficult as the renewable penetration becomes higher. The recent rise of electric vehicles (EVs) provides us with an opportunity to increase self-consumption of solar photovoltaic (PV) at households with substantially lower additional costs. In this paper, an environmental techno-economic assessment of residential PV systems is conducted with battery or EVs allowing charging and discharging (Vehicle to Home: V2H) in Kyoto, Japan, and Shenzhen, China, incorporating the cost projections of these technologies towards 2030. It is found that “PV + EV” (V2H) becomes highly cost-effective towards 2030 in Kyoto in comparison with “PV only”, “PV + battery”, and “EV charge”. In the region of lower electricity costs such as Shenzhen, switching to EVs from gasoline vehicles is the most cost-effective option during 2020s. Finally, it is found that “PV + EV” has the highest CO2 emission reduction potential across all the technology combinations considered, owing to EV charging of carbon-free electricity from PV. To facilitate a rapid household decarbonization, policy makers should reinforce policies to enhance the penetration of combined technologies of “PV + EV” (V2H) towards 2030.

Introduction

The access to low cost renewable energy technologies has started to decarbonize energy systems and replace fossil fuels across many region in the world (IEA, 2018). Between 2010 and 2017, wind generation capacity has increased 3 times, solar generation capacity has increased 13 times, and global electricity generation has increased by 18% (BP, 2018). In 2017, wind and solar power generation supplied 5.9% of global electricity generation (IEA, 2018). However, the speed of the decarbonization process is still too slow to minimize the impacts of climate change (IPCC, 2018). The extent of renewable energy penetration such as solar, wind, hydro, and biofuels, around the world is highly dependent on the endowment of geographically favorable terrain and local conditions such as insolation, policy, costs, economy, and power systems. Therefore, to create appropriate strategies for deep decarbonization, the local conditions must be considered (Kammen and Sunter, 2016).

In the case of Japan, the introduction of the feed-in-tariffs (FITs) in 2009 significantly increased the renewable energy penetration of solar Photovoltaic (PV) from 2.6 GW in 2009 to 49 GW in 2017, but also wind generation that increased from 2.0 GW to 3.3 GW in the same period (BP, 2018). However, increased social burden from financing the FIT surcharge, $21 billion in FY2017 (METI, 2019a), became a political issue, generating a debate on how much FITs should be used to further expand renewables. The costs of renewable energy in Japan are one of the highest in the world (BNEF, 2018a), partly owing to the earlier lavish FIT prices. Therefore, finding economical pathways for renewable expansion is increasingly important for the Japanese society at a time when the first FIT projects from 2009 begin to phase out in the fall of 2019.

In the case of China, the FITs of wind and solar PV were introduced in 2009 and 2011, respectively. With the declining cost of these technologies, China has grown to become the biggest renewable energy user in the world. In 2017, the installed power generation capacity of wind and solar PV of China was 163 GW and 130 GW, respectively (CNREC, 2018). However, most of the renewable energies were built in the western to northern regions, far from the high electricity demand regions on the eastern coast. Because of the low electricity transmission capacity between those two regions, China is having to curtail large amounts of their renewable energy generation (CNREC, 2015). Since 2013, the Chinese government has started to promote distributed solar PV in the eastern coastal region. The distributed solar PV since expanded from 0.8 GW in 2013 to 30 GW in 2017 (China Eelectricity Council, 2018), and the government planned to introduce an additional 10 GW of distributed solar PV in 2018 (National Development and Reform Commission, 2018).

Another important development regarding renewable energy penetration is global electric vehicle (EV) expansion (IEA, 2019). In 2018, the number of EVs globally reached 5.1 million, increasing 2 million from 2017 (IEA, 2019). From transport sector decarbonization, this trend is likely to continue in the coming decades (IEA, 2019). EVs not only help to reducing CO2 from the transport sector but can play a role as an energy storage that is critical for variable renewable energy (VRE) penetration (O’Shaughnessy et al., 2018; Yamagata et al., 2016; Yamagata and Seya, 2014). However, owing to the low penetration of EVs at present, the potentials for EVs as energy storage are not yet fully realized. The rapid global expansion of EVs continues to lower the prices of batteries and EVs through mass production (BNEF, 2018b, 2018c), and the projections of these prices are also being revised every year further lower (BNEF, 2016a). Thus, the potentials of EVs need to be reassessed thoroughly for a rapid decarbonization of energy systems.

In this study, economic and environmental assessments of integrating household PV systems are performed with either a standalone battery system or EV with a vehicle-to-home (V2H) system for bi-directional electricity flows. PV, battery, and EV costs are projected to drop toward 2030. Then, the most cost-effective technology combinations and their impacts on household energy costs and CO2 emissions by 2030 in Kyoto City, Japan and in Shenzhen, China are identified. The Kyoto City (hereafter Kyoto) is the 8th largest city in Japan with 1.5 million population. Shenzhen is the fourth largest city in China with 12 million population, arguably the most advanced city in the EV penetration for public buses (100%), taxis (nearly 100%), and logistic vehicles (24% in 2018) (Crow et al., 2019). Each city represents respective country’s urban environments and future directions, such that they are chosen for this study. Also, by comparing two cities in different regulatory systems and economic situations, a wider spectrum of model applicability of renewable technologies can be elucidated.

This paper is organized as follows. In Section 2, backgrounds and literature review of the study are introduced. In Section 3, the methods including technology and energy costs, and models are explained. In Section 4, the scenarios and results are presented. Section 5 discusses the implications of these results, and considerations for policy makers. In Section 6, our analyses and results are concluded.

Section snippets

V2H system

The most widely available renewable resources, namely solar and wind, are variable in nature, and at significant quantities require energy storage to supply electricity demand (Hoppmann et al., 2014). With the expansion of EV, standalone battery costs are rapidly declining and enhancing the economic viability of residential “PV + battery” systems through increased self-consumption (Hoppmann et al., 2014; Say et al., 2019, 2018; Yu, 2018). However, the battery system costs (lithium-ion

Methods

To evaluate the economic and environmental effectiveness of technology combinations (PV only, PV + battery, PV + EV, EV charge) for households, a techno-economic model is utilized (Say et al., 2018). The model consists of technical and financial models (Fig. 2). The technical model calculates matching of electricity demand and supply from PV, grid, and battery (incl. EV) with given demand, insolation, and EV driving profiles in an hourly resolution. PV and battery capacities are selected to

Scenarios

28 scenarios are analyzed for Kyoto (scenario K) and Shenzhen (scenario S) households with four technology combinations (“PV only”, “PV + EV”, “PV + battery”, “EV charge only”), annual tariff increases of 0% or 1% (Fig. 4), and with or without FITs (Fig. 4, Table 1). The option of “EV charge only” has no PVs so that FITs are not applicable. Increasing tariff annually by 1% leads the tariff from $0.25/kWh in 2018 to $0.31/kWh in 2039 in Kyoto, and $0.10/kWh in 2018 to $0.13/kWh in 2039 in

Discussions and policy implications

Within the technical combinations that we considered, the “PV + EV” stands out as the economically and environmentally best option by 2030 (Fig. 10). On the other hand, “PV + battery” has limited benefits by 2030 even compared with “PV only”, indicating that the EV’s additional values as energy resource will play important roles for household decarbonization near future. However, the “PV + EV” has also limitations. Diverse driving patterns influence the economic feasibility of the “PV + EV”,

Conclusions

Increasing cheaper renewable energy and higher penetration of EVs are creating new opportunities to decarbonize energy systems. In this study, it is demonstrated how “PV + EV” and “PV + battery” systems may play roles in households in Kyoto, Japan and Shenzhen, China for deep decarbonizatoin of their electricity systems towards 2030. Higher electricity tariffs ($0.25/kWh) in Kyoto provides the best opportunity for “PV + EV” to develop, and by 2030 NPV increases to around $6,900 ± 1,600 with

Contribution

Takuro Kobashi: Conceptualization, Methodology, Software, writing, Writing - Original Draft, Validation, Writing - Review & Editing, Funding acquit ion. Kelvin Say: Software, Writing - Review & Editing. Jiayang Wang: Investigation, Writing - Review & Editing. Masaru Yarime: Investigation, Writing - Review & Editing. Dong Wan: Investigation. Takahiro Yoshida: Investigation. Yoshiki Yamagata: Resources.

Funding

This work was supported by Research Institute for Humanity and Nature, Kyoto, Japan [FS to T. Kobashi].

Declaration of competing interest

None.

Acknowledgements

This research was conducted as part of the Kyoto-Shenzhen Deep Decarbonization project for the Research Institute for Nature and Humanity (RINH). We appreciate Masakazu Shio at Sekisui Heim for proving the V2H information.

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